Economy

Historic Deal Will Bring $15 Minimum Wage To California

CREDIT: AP Photo/Damian Dovarganes

Laphonza Butler, President of SEIU ULTCW, the United Long Term Care Workers’ Union, far left, joins workers demanding the Los Angeles City Council to vote to raise the minimum wage Tuesday, May 19, 2015, in Los Angeles.

UPDATE

California Gov. Jerry Brown (D) announced the agreement to raise the state’s minimum wage at a press conference in Sacramento on Monday. “An agreement has been reached with key labor leaders, legislative leaders and my administration to raise the minimum wage over time to $15 an hour, making California the first state to do that,” he said. “It’s a matter of economic justice and it makes sense.”

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A statewide $15 minimum wage will soon be reality in California, thanks to a deal made between state legislators and labor unions.

According to the Los Angeles Times, which spoke with sources close to the negotiations and first reported the story, under the deal, the current $10 per hour minimum wage will be increased by 50 cents in 2017 and again in 2018. The minimum wage would then be increased by $1.00 a year until 2022. Businesses with less than 25 employees, however, would have until 2023 to give workers a $15 hourly minimum wage. In the case of an economic downturn, the state governor would be able to temporarily stop some of the increases.

The deal was made Saturday afternoon, according to the Los Angeles Times report, and Gov. Jerry Brown (D) may formally announce it as early as Monday. The deal still needs to be confirmed by the state legislature, which could vote on the issue as soon as the end of next week.

“This is not a done deal,” Sen. Mark Leno (D-San Francisco) told the Associated Press on Saturday. “Everyone’s been operating in good faith and we hope to get it through the Legislature.”

If the deal does not pass the state legislature, voters will still have a chance to increase the state’s minimum wage themselves. A union proposal to increase the minimum wage to $15 an hour by 2021 is already on the November 8 ballot. A second union proposal aims to have a $15 minimum wage by 2020, but it is not yet on the ballot.

California’s minimum wage of $10 an hour is already higher than many other states in the nation, but as ThinkProgress has previously reported, a $15 minimum wage is still far below a living wage in states like California, where a minimum wage of $22 makes more sense.

A higher minimum wage isn’t only great for struggling workers, however. Various studies have found that a higher minimum wage can lead to greater worker efficiency, lower turnover for businesses, and greater GDP and job growth due to the extra money many workers will have in their pockets to spend. In 2014, 13 states that increased their minimum wage, either due to legislation or automatic increases to meet changes in inflation, experienced higher average job growth than the rest of the country.

Presidential candidates Hillary Clinton and Sen. Bernie Sanders (D-VT) have both called for a higher minimum wage, but California’s push to make it a reality may make the minimum wage come even more to the forefront in their campaigns.

While Sanders has called for a $15 minimum wage throughout the country, Clinton has previously said that it may not be right for every state. “I think part of the reason that the Congress and very strong Democratic supporters of increasing the minimum wage are trying to debate and determine what’s the national floor is because there are different economic environments,” Clinton said in New Hampshire last July. “And what you can do in L.A. or in New York may not work in other places.”